Apple's continued success as a music service provider will depend on how well iTunes works in Windows, and its ability to offer all the features of the iPod at the right price.

Mike McGuire, research director at GartnerG2, told E-Commerce Times: "Apple's user interface must be as good on the Windows platform as it is on the Mac, which could be difficult as Apple will be acting as a third-party software developer."

Bryan Chaffin, of The Mac Observer, said: "Apple's biggest challenge will be ensuring QuickTime, AAC and iTunes work well in Windows. Many Windows users have a poor opinion of QuickTime because of its performance on a PC. Apple must ensure iTunes runs transparently on Windows."

Chaffin added: “By not making its music platform, with AAC (Advanced Audio Coding) and its own patented DRM (Digital Rights Management) technology, FairPlay, available to third-parties Apple will be pitting itself against Microsoft and every vendor of online music and MP3 player. Microsoft controls the Windows Media Player (WMA) platform, but is more than willing to license it out."

Chaffin says this means every MP3 player bar the iPod will eventually play WMA, files while none will play Apple's AAC files. He said: "This isn't a problem as long as iPod maintains market dominance, but a hot new MP3 player could be a huge problem for Apple."

Chaffin, however, suggests Apple is on the right side of the standards divide: "WMA is not an open standard, while AAC is.

Dominant “More importantly, Apple's AAC/FairPlay platform is dominant, making Apple the standards leader. If there's an argument to be made about adhering to standards, it's the WMA banner wavers that are on the wrong side of the battle lines."

Regarding Dell's latest offering he said: "Dell is rebranding a third-party music service and a third-party MP3 player. It's nothing new, nothing original and nothing that Dell can really claim as its own."

But IDC senior analyst Susan Kevorkian said: "Portable jukeboxes like the iPod are less accessible to the mainstream consumer market because of their high price point. Although the capacity of these devices increases regularly, prices of lower-capacity units do not necessarily drop in corresponding fashion."

GartnerG2's McGuire questioned whether Apple should consider lowering the price of its iPod: "It's tough to fight desire to make it cheaper, but there's a serious risk involved. It's important that Apple does not violate the underlying brand promise it has established."

Chaffin agreed: "There will always be room for cheap, low-capacity MP3 players, but it's better for a company like Apple to let the consumer electronics brands fight it out for the low end in this market. Apple cannot offer the kinds of features the company is now known for in the MP3 space for the under-$80 market."

Adam Engst, publisher of Mac community newsletter TidBITS, said: "Just as with the iTunes Music Store, the iPod is simply better done than most of the competitors - better interface, better integration, better industrial design. If Apple can repeat that win in other areas that bridge the gap between computers and consumer electronics, they could be highly successful, even without gaining much market share on the computer side."